US — Lawrence Aviation Industries owner Gerald Cohen has been ordered to pay US$1.38m into the company's 401(k) plan and been permanently barred from serving as plan fiduciary after he was found guilty of loaning plan assets that were never repaid.
The Department of Labor (DoL) yesterday obtained the consent judgement that resolved a lawsuit against the company and its owner.
The suit was filed in May 2004 against the Long Island company and owner over alleged violations of the federal Employee Retirement Income Security Act. According to the allegations, the defendants made loans to themselves from plan assets which they never repaid, and failed to collect employee contributions owed to the plan.
DoL secretary of Labor Elaine Chao accused Cohen of using the employees’ 401(k) plan as his “personal piggy bank”, and added: “I am pleased that the department was able to obtain a court order on behalf of the employees to restore... what was taken from their 401(k) plan.”
By Damian Clarkson
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